Cyprus Housing

Cyprus sees dramatic fall in housing purchases

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The number of housing transactions in Cyprus dropped by 23.3% last year, the sharpest fall among the 13 EU member countries for which data are available, Eurostat data showed.

The EU’s statistical office noted that in 2020, the number of housing transactions decreased in several EU countries compared to 2019 despite a continued upwards trend in house prices. This drop in the number of transactions comes after an increase in nearly all of those countries in 2019 compared to 2018.

The drop in the number of transaction can be linked to COVID-19 lockdown measures, in particular in the second quarter of 2020, which included a temporary suspension of real estate activity, according to Eurostat.

The largest decreases in the number of transactions in 2020 were recorded in Cyprus (-23.3%), Slovenia (-17.5%), Belgium (-17.4%) and Ireland (-16.4%).

Only three countries recorded an increase in the number of housing transactions: Finland (+7.7%), the Netherlands (+10.0%) and Denmark (+20.1%).

Cyprus Housing
(Source: Eurostat)

In a separate release Eurostat data showed that Cyprus was the only EU member state that experienced a fall in annual house prices during the first quarter of 2021 and only one of three that experienced a quarterly fall.

Annual house prices in the EU, as measured by the House Price Index (HPI), rose by 5.8% in eurozone and by 6.1% in the EU compared with the same quarter of the previous year.

The bloc’s statistics office reported that this is the highest annual increase for eurozone since the fourth quarter of 2006, and since the third quarter of 2007 for the EU. In the fourth quarter of 2020 house prices rose by 5.6% and 5.8% respectively.

Among the member states for which data are available, the highest annual increases in house prices in the first quarter of 2021 were recorded in Luxembourg (+17.0%), Denmark (+15.3%), Lithuania (+12.0%), Czechia (+11.9%) and the Netherlands (+11.3%), while prices fell only in Cyprus (-5.8%). Compared with the previous quarter, the highest increases were recorded in Estonia (+6.6%), Denmark (+5.8%) and Lithuania (+5.0%), while decreases were observed only in Cyprus (-5.8%), Malta (-1.6%) and Slovakia (-1.2%).

The HPI measures the price changes of all residential properties purchased by households (flats, detached houses, terraced houses, etc.), both newly built and existing, independently of their final use and independently of their previous owners.

Eurostat also reported that over 10 years (from 2010 to the 1st quarter of 2021), rents have gone up by 15.3% while house prices increased by 30.9% in the EU.

When comparing the first quarter of 2021 with 2010, house prices increased more than rents in 17 EU Member States. House prices increased in 23 Member States and decreased in four, with the highest rises in Estonia (+126.8%) and Luxembourg (+108.2%). Decreases were observed in Greece (-28.1%) Italy (-14.4%), Cyprus (-8.9%) and Spain (-4.8%). For rents prices increased in 25 EU Member States and decreased in two, with the highest rises in Estonia (+140.4%), Lithuania (+108.6%) and Ireland (+63.3%). Decreases were recorded in Greece (-25.2%) and Cyprus (-3.8%).